IRS Rule Change Could Endanger Charities and Donors

IRS Rule Change Could Endanger Charities and Donors

Donors aren’t the only ones with something to fear from the proposed rule. Charities, too, are at risk, and they are making their concerns known. Among the nearly 38,000 comments on the proposal was “a letter signed by 215 charitable organizations that warns they cannot possibly safeguard the Social Security numbers of their donors,” penned The Hill.

“Nonprofits say they will be forced to invest in expensive cyber security defenses to ward off hackers, but any breaches would open them up to lawsuits,” the paper added. What’s more, the “associated liabilities could hamper the recruitment of board members,” Tim Delaney, president and CEO of the National Council of Nonprofits, told the NonProfit Times.

Even if all nonprofits could guarantee the security of their donors’ SSNs, the rule would still threaten their fundraising, Delaney said.

“As soon as this thing hits the books, it’s dangerous,” he asserted. “Even if not one nonprofit does it, it creates danger. Suddenly, the scam artists can use it [by posing as charities and obtaining people’s SSNs]. That, then, creates the identity-theft opportunity. As soon as that happens and news gets out, it will have a further chilling effect on nonprofits. People will say ‘I don’t want to go anywhere near that.’”